Student Loan Limits Not Keeping Up with Tuition Rates

As tuition rates at many colleges continues to rise, the limits that students may borrow each year has stayed the same.

Dependent undergraduates may borrow up to $2,625 their freshman year, $3,500 their sophomore year and $5,500 for each remaining year in Stafford Loans.

Students classified as independent from parents, may qualify for additional unsubsidized loans. Dependent students may also receive unsubsidized loans if parents do not qualify for a PLUS loan.

Unsubsidized loans can be a double edged sword -- they allow the student to pay for college, but borrowers do not receive the interest free benefit of subsidized loans.

There is also cumulative limit of $23,000 for an undergraduate education.

The limits on amounts students can borrow though federal loans hasn't increased since 1992. In that time tuition rates have more than doubled.

According to finaid.org, tuition rates increase at about twice the general inflation rate. On average, tuition tends to increase about 8% per year. In addition, general inflation has caused prices for student housing, meals and other necessary expenses to increase.

For the school year 2005-2006 many colleges dramatically raised tuition rates. An example of such tuition hikes is the University of Colorado where rates rates have been raised for all of the system's campuses. Tuition at CU-Boulder will go up by 27.8 percent, from $3,480 to $4,446. Other CU campuses will see a similar increase.

The national average tuition for public universities is $4,694 per year for in state residents. For freshmen and sophomore students, the current student loan limit does not even cover tuition costs.

Because of the restrictions with federal student loan limits, students and parents will need to become more diligent in seeking out alternative sources of college funding.

There are many scholarships available nationwide that students can apply for. One of the easiest ways to apply is through the FastWeb online database. There are also many books available that list scholarships that students can apply for.

Part time and summer student employment also becomes more important when education costs rise.

Until the federal government reconsiders raising the student loan limits, students will become increasingly dependent upon scholarships, savings and employment. The lesson for families with children not yet in college is simple -- start saving early.

Michael Carter is a contributor at College Financial Aid Guide, an informational resource for educational funding, scholarships and student loans.

---

Alternative Venture Finance: Federal Grants and Loans

While most companies seeking venture capital initially think about angel... Read More

A Borrowers Guide to Bad Credit Loans UK

If you find yourself in a situation where you need... Read More

How to Find a Good UK Secured Homeowner Loan

If you're looking for a UK secured homeowner loan, you... Read More

Zero Zero Financing on Automobiles in Retrospect

Some say that the automobile industry saved the economy during... Read More

Industry Regulation and Recent Legislation

A number of states from coast to coast are attempting... Read More

Benefits of a Home Improvement Loan

Some of the many benefits of a Home Improvement Loan... Read More

What You Should Know About Home Equity Loans

A home equity loan is essentially a type of second... Read More

Education Loans Can Augment The Boundaries Of What You Can Achieve

Education never ends ? it is not said without reason.... Read More

What Is A Payday Loan?

A Payday loan is a small, short-term, high-rate loan. It... Read More

Student Loan Limits Not Keeping Up with Tuition Rates

As tuition rates at many colleges continues to rise, the... Read More

Want a Cheaper Finance for Your Vehicle? Try Secured Automobile Loans

The usual modus operandi in most automobile purchases is as... Read More

Poor Credit Mortgage - Overcoming Financial Slumber

There is a huge market for homeowners who have credit... Read More

Cash Loans: The Good, the Bad, and the Debt-Free

Happiness is what they're selling. Relief from the crushing weight... Read More

Online Loans Made Easy

What will it take for you to get a low... Read More

The Ins and Outs of Loans for Military

Under the microscope loans for military really are different from... Read More

Benefits of a Business Loan

There are many benefits in choosing a business loan, some... Read More

What is an Auto Loan?

An Auto loan is basically another name for a car... Read More

What is a Home Improvement Loan?

A UK Home Improvement Loan Can Give You The Home... Read More

Quick Cash Loans Online - A Fast Way to Get an Emergency Cash Advance

If you need a fast way to get an emergency... Read More

Military Loan and Military Loans

Military loans are made available to active servicemen and retirees... Read More

Cant Wait For Payday? Try Check Advance

Check advance can come in really handy when you're waiting... Read More

Auto Loans: Top 5 Tips For The Best Rate

You've got your eye on that shiny new Lexus -... Read More

Fast Money: A Guide to Fast Secured Loans

Here is a useful guide to fast secured loans. Here... Read More

Hidden Bank Loan Charges That Would Make a Pick-Pocket Envious

There can be more to a bank business loan than... Read More

What is the Difference Between an Unsecured Personal Loan and a Secured Personal Loan?

This is a common question that many consumers have. Many... Read More

Become A Smarter Borrower

With a nation that has in the region of a... Read More

Wedding Loans Because Wedding May Be Made In Heaven But They Are Certainly Not Made For Free

Wedding loans because wedding may be made in heaven but... Read More

A Guide to Debt Consolidation Loans

Should you find yourself overcome by debt, you might want... Read More

Do You Qualify for a Loan?

Like most people, you will probably wait until submitting a... Read More

No Money Down Real Estate - Fund All Your Deals With Private Lending!!

If you invest in real estate, you need cash to... Read More

When the Bank Says NO!

Factoring has been practiced for centuries. The Romans sold promissory... Read More

Is a Microloan Right for You?

If you've been tossing around an idea for a small... Read More

Small Business Loans Can Help You Write Your Success Story

Scene one: you are sitting on your office desk surrounded... Read More